If the parents plan to postpone a sale until 2008 when the child's capital gain rate could be zero, they have to make sure that he or she reaches 18 by then; otherwise, the gain will still be taxed at the parents' (presumably higher) rate (see CCH, Tax Increase Prevention and Reconciliation Act of 2005: Law and Explanation, [paragraph] 210).

Payments on installment sales completed before enactment will receive the benefit of lower capital gains rates, but installment sales should be structured with an eye towards increases in capital gains rates, currently scheduled for 2009.

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